Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10−Q
(Mark One)
☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended: December 31, 2016
☐ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the transition period from ____________ to _____________
Commission File Number: 333-173680
GLORYWIN ENTERTAINMENT GROUP INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada |
|
27-3369810 |
(State
or other jurisdiction of incorporation or organization) |
|
(I.R.S.
Employer Identification No.) |
20/F, AIA Tower,Nos 251A-301, Avenida Commercial de Macau,
Macau
(Address of principal executive offices, Zip Code)
+853 8294-2333
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol |
Name
of each exchange on which registered |
|
|
|
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required
to submit such files).
Yes
☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer”,
“smaller reporting company”, and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large
accelerated Filer ☐ |
Accelerated
Filer ☐ |
Non-accelerated
Filer ☐ |
Smaller
reporting company ☒ |
|
Emerging
growth company ☐ |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
☐ No ☒
The number of shares outstanding of each of the issuer’s classes of
common stock, as of June 5, 2022 is as follows:
Class
of Securities |
|
Shares
Outstanding |
Common
Stock, $0.001 par value |
|
356,194,747 |
GLORYWIN ENTERTAINMENT GROUP INC.
Quarterly Report on Form 10-Q
Period Ended December 31, 2016
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
ITEM
1. |
FINANCIAL
STATEMENTS. |
|
GLORYWIN
ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE
SHEETS |
|
As
of December 31, 2016 and March 31, 2016 |
|
|
December 31, |
|
|
March
31, |
|
|
|
2016 |
|
|
2016 |
|
|
|
(Unaudited) |
|
|
(As
Restated) |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
252 |
|
|
$ |
252 |
|
Accounts
receivable |
|
|
– |
|
|
|
– |
|
Other
current assets |
|
|
– |
|
|
|
– |
|
Total current
assets |
|
|
252 |
|
|
|
252 |
|
|
|
|
|
|
|
|
|
|
Non - current
assets |
|
|
|
|
|
|
|
|
Construction in
process |
|
|
– |
|
|
|
– |
|
Deposits for long-term operating leases |
|
|
– |
|
|
|
– |
|
Total
non-current assets |
|
|
– |
|
|
|
– |
|
Total
assets |
|
$ |
252 |
|
|
$ |
252 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
– |
|
|
|
– |
|
Accrued
liabilities and other payables |
|
|
92,154 |
|
|
|
33,263 |
|
Taxes payable |
|
|
– |
|
|
|
– |
|
Other
payables - related parties |
|
|
– |
|
|
|
– |
|
Total
current liabilities |
|
|
92,154 |
|
|
|
33,263 |
|
Total
liabilities |
|
|
92,154 |
|
|
|
33,263 |
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
|
|
|
|
|
|
Common stock,
$0.001 par value, 490,000,000 shares authorized, 102,100,338 and
50,900,338 shares issued and outstanding as of December 31, 2016
and March 31, 2016, respectively |
|
|
102,100 |
|
|
|
50,900 |
|
Additional paid-in
capital |
|
|
1,839,796 |
|
|
|
1,890,996 |
|
Accumulated other
comprehensive loss |
|
|
(11,282 |
) |
|
|
(11,094 |
) |
Retained earnings |
|
|
(2,022,517 |
) |
|
|
(1,963,813 |
) |
Total
shareholders' equity |
|
|
(91,903 |
) |
|
|
(33,011 |
) |
Total
liabilities and shareholders' equity |
|
$ |
252 |
|
|
$ |
252 |
|
See
notes to unaudited consolidated financial statements |
GLORYWIN
ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME |
For
the Three and Nine Months Ended December 31, 2016 and
2016 |
|
|
For the Three Months
Ended December 31, |
|
|
For the Nine Months
Ended December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
– |
|
|
$ |
1,948,295 |
|
|
$ |
– |
|
|
$ |
5,464,068 |
|
Gross profit |
|
|
– |
|
|
|
1,948,295 |
|
|
|
– |
|
|
|
5,464,068 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
expenses |
|
|
41,513 |
|
|
|
407,093 |
|
|
|
58,704 |
|
|
|
1,315,330 |
|
Professional
fees |
|
|
– |
|
|
|
58,854 |
|
|
|
– |
|
|
|
152,168 |
|
Total
operating expenses |
|
|
41,513 |
|
|
|
465,947 |
|
|
|
58,704 |
|
|
|
1,467,498 |
|
Income before provision for income
taxes |
|
|
– |
|
|
|
1,482,348 |
|
|
|
– |
|
|
|
3,996,570 |
|
Provision for
income taxes |
|
|
– |
|
|
|
(207,758 |
) |
|
|
– |
|
|
|
(602,954 |
) |
Net income
(loss) |
|
$ |
(41,513 |
) |
|
$ |
1,274,590 |
|
|
$ |
(58,704 |
) |
|
$ |
3,393,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(41,513 |
) |
|
$ |
1,274,590 |
|
|
$ |
(58,704 |
) |
|
$ |
3,393,616 |
|
Total
comprehensive income (loss) |
|
$ |
(41,513 |
) |
|
$ |
1,274,590 |
|
|
$ |
(58,704 |
) |
|
$ |
3,393,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
|
$ |
0.06 |
|
|
$ |
0.00 |
|
|
$ |
0.16 |
|
Diluted |
|
$ |
0.00 |
|
|
$ |
0.06 |
|
|
$ |
0.00 |
|
|
$ |
0.16 |
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
102,100,338 |
|
|
|
20,900,338 |
|
|
|
68,773,793 |
|
|
|
20,866,883 |
|
Diluted |
|
|
102,100,338 |
|
|
|
20,900,338 |
|
|
|
68,773,793 |
|
|
|
20,866,883 |
|
See
notes to unaudited consolidated financial statements
GLORYWIN
ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY
For
the Year Ended March 31, 2016 and Nine Months Ended December 31,
2016
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated Other
Comprehensive |
|
|
Retained |
|
|
Shareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Loss |
|
|
Earnings |
|
|
Equity |
|
Balance - March 31, 2014 |
|
|
– |
|
|
$ |
– |
|
|
|
9,805,044 |
|
|
$ |
9,805 |
|
|
$ |
91,850 |
|
|
$ |
– |
|
|
$ |
(118,524 |
) |
|
|
(16,869 |
) |
Share issued for acquisition of Top
Point |
|
|
– |
|
|
|
– |
|
|
|
10,195,294 |
|
|
|
10,195 |
|
|
|
(10,195 |
) |
|
|
– |
|
|
|
– |
|
|
|
– |
|
Share based compensation -
employees |
|
|
– |
|
|
|
– |
|
|
|
100,000 |
|
|
|
100 |
|
|
|
199,900 |
|
|
|
– |
|
|
|
– |
|
|
|
200,000 |
|
Share issued to third parties for
services provided |
|
|
– |
|
|
|
– |
|
|
|
100,000 |
|
|
|
100 |
|
|
|
199,900 |
|
|
|
– |
|
|
|
– |
|
|
|
200,000 |
|
Share issued to related parties for
services provided |
|
|
– |
|
|
|
– |
|
|
|
600,000 |
|
|
|
600 |
|
|
|
1,199,400 |
|
|
|
– |
|
|
|
– |
|
|
|
1,200,000 |
|
Acquisition of Wonderful Gate |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(7,692 |
) |
|
|
– |
|
|
|
– |
|
|
|
(7,692 |
) |
Debt forgiveness |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
16,869 |
|
|
|
– |
|
|
|
– |
|
|
|
16,869 |
|
Net income |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1,067,232 |
|
|
|
1,067,232 |
|
Foreign currency
translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(3,756 |
) |
|
|
– |
|
|
|
(3,756 |
) |
Balance - March 31, 2015 |
|
|
– |
|
|
|
– |
|
|
|
20,800,338 |
|
|
|
20,800 |
|
|
|
1,690,032 |
|
|
|
(3,756 |
) |
|
|
948,708 |
|
|
|
2,655,795 |
|
Contributions from shareholder |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
9,000 |
|
|
|
– |
|
|
|
– |
|
|
|
9,000 |
|
Share based compensations -
employees |
|
|
– |
|
|
|
– |
|
|
|
100,000 |
|
|
|
100 |
|
|
|
224,900 |
|
|
|
– |
|
|
|
– |
|
|
|
225,000 |
|
Acquisition of Little Wooden
house |
|
|
|
|
|
|
|
|
|
|
30,000,000 |
|
|
|
30,000 |
|
|
|
(32,946 |
) |
|
|
– |
|
|
|
– |
|
|
|
(2,946 |
) |
Exchange Reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,338 |
) |
|
|
– |
|
|
|
(7,338 |
) |
Net income |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(2,912,521 |
) |
|
|
(2,912,521 |
) |
Balance – March 31,
2016 |
|
|
– |
|
|
|
– |
|
|
|
50,900,338 |
|
|
|
50,900 |
|
|
|
1,890,991 |
|
|
|
(11,094 |
) |
|
|
(1,963,813 |
) |
|
|
(33,016 |
) |
Contribution from
Shareholder |
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
Acquisition of
Top Honesty Biomass Sdn Bhd |
|
|
|
|
|
|
|
|
|
|
51,200,000 |
|
|
|
51,200 |
|
|
|
(51,195 |
) |
|
|
– |
|
|
|
– |
|
|
|
5 |
|
Exchange
Reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(188 |
) |
|
|
|
|
|
|
(188 |
) |
Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,065,987 |
) |
|
|
(2,065,987 |
) |
Balance - December 31,
2016 |
|
|
– |
|
|
$ |
– |
|
|
|
102,100,338 |
|
|
$ |
102,100 |
|
|
$ |
1,839,796 |
|
|
$ |
(11,282 |
) |
|
$ |
(4,029,800 |
) |
|
$ |
(2,099,186 |
) |
See
notes to unaudited consolidated financial statements |
GLORYWIN
ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
CASH FLOWS |
For
the Nine Months Ended December 31, 2016 and 2015 |
|
|
|
For the Nine Months Ended December 31, |
|
|
|
2016 |
|
|
2015 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net
income |
|
$ |
(58,704 |
) |
|
$ |
3,393,616 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Expenses paid
and waived by shareholder |
|
|
– |
|
|
|
9,000 |
|
Depreciation
expenses |
|
|
– |
|
|
|
3,014 |
|
Share based
compensation - employees |
|
|
– |
|
|
|
225,000 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
– |
|
|
|
(1,359,303 |
) |
Other current
assets |
|
|
– |
|
|
|
– |
|
Deposits for
long-term operating leases |
|
|
– |
|
|
|
(30,000 |
) |
Taxes
payable |
|
|
– |
|
|
|
(604,960 |
) |
Accrued
liabilities and other payables |
|
|
58,892 |
|
|
|
191,131 |
|
|
|
|
|
|
|
|
|
|
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
|
|
188 |
|
|
|
3,037,418 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of
property, plant and equipment |
|
|
– |
|
|
|
(32,150 |
) |
Cash
paid for construction in process |
|
|
– |
|
|
|
(3,115,068 |
) |
|
|
|
|
|
|
|
|
|
NET CASH
USED IN INVESTING ACTIVITIES |
|
|
– |
|
|
|
(3,147,218 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from
related party advances |
|
|
– |
|
|
|
324,544 |
|
Repayments to related party advances |
|
|
– |
|
|
|
(415,703 |
) |
|
|
|
|
|
|
|
|
|
NET CASH
PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
– |
|
|
|
(91,159 |
) |
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH |
|
|
(188 |
) |
|
|
– |
|
NET INCREASE/(
DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
– |
|
|
|
(200,959 |
) |
CASH AND
CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
252 |
|
|
|
213,974 |
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
252 |
|
|
$ |
13,015 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
– |
|
|
$ |
– |
|
Income taxes |
|
$ |
– |
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
NON-CASH DISCLOSURE
OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Shares
issued for acquisition of Top honesty Biomass Sdn Bhd |
|
$ |
51,200 |
|
|
$ |
– |
|
Debt
forgiveness |
|
$ |
– |
|
|
$ |
– |
|
Shares
issued for acquisition of Top Point |
|
$ |
– |
|
|
$ |
– |
|
See
notes to unaudited consolidated financial statements
Glorywin Entertainment Group Inc. and Subsidiaries
(FORMERLY ZIPPY BAGS, INC.)
Notes to Unaudited Consolidated
Financial Statements
Note 1 – Nature of Business
Glorywin Entertainment Group Inc. (“Glorywin”), formerly known as
Zippy Bags, Inc., was incorporated in the state of Nevada on August
26, 2010 (“Inception”). It was initially formed to market a
snowboard carrying bag locally, in the Salt Lake City, Utah area to
snowboard shops and outdoor retailers.
On June 17, 2014, Janet Somsen, the original owner of Glorywin,
entered into a security purchase agreement to sell 44.5% of
Glorywin’s outstanding shares, or 4,365,000 shares, of common
stock, to Taipan Pearl Sdn Bhd and Wenwei Wu in exchange for an
aggregate purchase price of $189,004 in cash. At the closing of the
transaction, Janet Somsen agreed that the previous officers would
resign, and all the debts, consisting of $11,719 of taxes payable,
$1,650 of accounts payable, and $3,500 of notes payable due to BK
Consulting and Associates, P.C. (“BK Consulting”), would be repaid
by Ms.Somsen. Glorywin is a shell company and has no
operations.
On the same day, Glorywin entered into a share transfer agreement
with Top Point Limited (“Top Point”), a company incorporated in
Samoa on April 9, 2014. Pursuant to the agreement, Glorywin issued
10,195,294 shares of common stock to Wen Wei Wu, Taipan Pearl Sdn
Bhd, Boon Siong Lee and Zhen Long Ho to acquire 1,000 common shares
(100%) of Top Point. Top Point is a shell company and has no
operations.
Simultaneously,
Glorywin paid Macanese Pataca (“MOP”) 60,000 (approximately $7,692)
to acquire Wonderful Gate Strategy Company Limited (“Wonderful
Gate”), a company incorporated on March 11, 2009 in Macau, China,
and had no operation prior to the acquisition from, Carmen Lum.
Since then, Wonderful Gate has been engaged in service of
introducing sub-junkets and information technology infrastructure
to land-based casinos and receiving an agreed percentage of total
bets as revenue. Wonderful Gate has introduced 25 sub-junkets to
initially three land-based casinos in Cambodia and reduced to two
land-based casinos to date, and the Company itself does not
hold license to operate casinos/junket or to conduct gaming
promotion business in any country.
The acquisitions were accounted for as acquisitions by entities
under common control due to the fact that each company was and
continued to be held by the Company and its affiliates. As such,
the transaction was recorded on the purchase method of accounting
at historical amounts.
After the above transactions, Taipan Pearl Sdn Bhd owns 56%
interest of the Glorywin and its subsidiaries, (collectively, “the
Company”, “us”), and became the biggest shareholder of the
Company.
On October 30, 2014, the Company changed its name to Glorywin
Entertainment Group, Inc.
Acquisition of Gwin Company Limited (Gwin)
On October 22, 2014, the Company orally entered into a conditional
sale agreement ("Conditional Sale Agreement"), which was later put
into a written form on January 19, 2015, with Taipan Pearl Sdn Bhd,
shareholder of 56% of the Company's interest. Pursuant to the
Conditional Sale Agreement, the Company agreed to pay a
total price of $2,000,000 to acquire Gwin Company Limited ("Target
Company", or "Gwin"), which is solely owned by Mr. Sing Hong Ting,
the 100% beneficial owner of Taipan Pearl Sdn Bhd.
Gwin obtained the formal approval of incorporation in
March, 2015 and did not generate any revenues since its
establishment. The sale would be completed under conditions that
the Target Company becomes profitable within 12 months from the
date of the Conditional Sale Agreement (“Profitability Condition”)
and that the Target Company maintains all necessary licenses to be
operational. If the two conditions were not satisfied, the
amount paid would be fully refunded. On February 18, 2015, the
Company signed a supplementary agreement to the Conditional Sale
Agreement ("Supplementary Agreement") with Taipan Pearl Sdn Bhd,
pursuant to which, another $2,000,000 would be paid by the Company
for acquisition of the Target Company. The incremental $2,000,000
would be used in renovating and operating of the Target
Company. The Company paid $3,180,425 as of March 31, 2015 and
continued to pay until September 29, 2015, when the Company entered
into a Closing Agreement ("Closing Agreement") with Mr. Sing Hong
Ting to officially acquire the Target Company. On November 11,
2015, the Company entered into an Amended and Restated
Agreement (“Restated Agreement”) with Mr. Sing Hong Ting. Pursuant
to the Closing Agreement and Restated Agreement, the Company: (1)
purchased 100% of Gwin’s equity interest, and all the advanced
payment to the Target Company, totalling $5,876,392, shall be
regarded as the final consideration of the sale, and therefore
shall not be refundable; (2) waived the Profitability Condition of
the Conditional Sale Agreement, which was not met as of September
29, 2015; and (3) agreed with the other signing party to correct
the seller of Gwin from Taipan Pearl Sdn Bhd to Mr. Sing Hong Ting.
On January 9, 2015, Gwin entered into a lease agreement to lease a
casino hotel building with equipment in it located in Kingdom of
Cambodia. Gwin is currently refurbishing the building and expects
to finish the refurbishment and start its operation in gaming and
hospitality industry in February, 2016.
Since the Company and Gwin are under common control by Mr. Sing
Hong Ting, the acquisition of Gwin was recorded as a transaction
between entities under common control. The Company has accounted
for Gwin’s operations on a retrospective basis in the Company’s
consolidated financial statements since Gwin incurred start-up
expenses from November 2014 which was before obtaining the
formal approval for incorporation. Accordingly, the consolidated
balance sheet as of March 31, 2015, the consolidated statement of
operations and comprehensive income for the three and nine months
ended December 31, 2014, the consolidated statement of changes in
shareholders’ equity for the year ended March 31, 2015, and the
consolidated statement of cash flows for the nine months ended
December 31, 2014 have been retrospectively restated in this report
to reflect Gwin’s accounts at their historical amounts as of those
dates.
On February 21, 2016, Messrs. Meng Hoa Duang, Lee Boon Siong and Ho
Zhen Lung (the “Resigning Officers”) had resigned as officers and
directors of the Company on the same day. Company’s Chairman Mr.
Wen Wei Wu later contacted Mr. Ming Kong Lee, who is a shareholder
of the Company, that we believes he has control on the Resigning
Officers. Mr. Ming Kong Lee revealed to Mr. Wu that he intended to
take away the business operation of GWIN Company Limited, and
Wonderful Gate Strategy Company Limited, both of which are wholly
owned subsidiaries of the Company in concert with his
brother-in-law, Mr. Sing Hong Ting who is a principal shareholder
of the Company. The Company is currently seeking legal remedies
against the Resigning Officers and Mr. Ting including the
cancellation of the shares of common stock of the Company owned by
them or entities controlled by them. However, as of the date
hereof, the Company currently does not have access to the operation
and business records of such subsidiaries. In addition, the
Company’s two customers, the two land based casinos in Cambodia,
which fully manage and handle former COO Mr. Ho Zhen Lung and
secretary Mr. Lee Boon Siong, that generated substantially all of
our revenues as part of our junket business notified the Company
that they were terminating their junket arrangement with the
Company. As a result, Company has lost the entire business in
junket services and also lost the control of Gwin.
On March 9, 2016, the Company’s Board of Directors approved a Share
Exchange Arrangement (the “Arrangement”) to be entered between the
Company and Mr. Wen Wei Wu, who is the Company’s Chairman and
Acting Chief Executive Officer during that time.
Subject to the Arrangement, the Company has agreed to acquire all
of the outstanding capital stock of Little Wooden Horse Trading
Company Limited (the “Trading Company”), a company incorporated in
the Macau Special Administrative Region of the People’s Republic of
China, in exchange for shares of the Company’s common stock, par
value $0.001 (the “Common Stock”). Mr. Wu is the sole holder of the
Trading Company. Pursuant to the Arrangement, the Company issued an
aggregate of 30,000,000 shares of the Common Stock to acquire the
Trading Company. The Trading Company is a new entity which has no
historical operations and plans to involve in consultancy and
trading of machineries related to activated carbon business.
On September 26, 2016, Glorywin Entertainment Group Inc., a Nevada
Corporation (the “Company”) entered into a Sale and Purchase
Agreement (the “Agreement”) with Mr. Ze Wu Xuan, the 100%
beneficiary owner of Top Honesty Biomass Sdn Bhd (“THBSB”), a
Malaysian company, to acquire all of the outstanding capital stock
of THBSB in exchange for the issuance to Mr. Xuan of an aggregate
of 51,200,000 shares of the Company’s common stock (the
“Acquisition”). The shares are subject to restrictions on resale
pursuant to Commission Rule 144 under the Securities Act. On
September 26, 2016, the record holder of 51,200,000 shares of the
Company’s common stock, equivalent to 56.97% of our then issued and
outstanding shares of common stock, the sole class of our voting
securities, adopted and approved the amendment to the Articles of
Incorporation by written consent in lieu of a meeting.
Note 2 – Significant Accounting Policies
Basis of Presentation
We prepared the consolidated financial statements in accordance
with accounting principles generally accepted in the United States
of America ("U.S. GAAP") and pursuant to the U.S. Securities and
Exchange Commission ("SEC") rules. We included all adjustments that
are necessary for the fair presentation of our financial position,
results of operations, and cash flows for the periods
presented.
We have defined various periods that are covered in this report as
follows:
"fiscal year 2015"—April 1, 2014 through March 31, 2015
"fiscal year 2016"—April 1, 2015 through March 31, 2016
Use of Estimates
The preparation of consolidated financial statements that conform
with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements,
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The Company continually evaluates its estimates, including those
related to bad debts, income taxes, and the valuation of equity
transactions. The Company bases its estimates on historical
experience and on various other assumptions that it believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Any
future changes to these estimates and assumptions could cause a
material change to our reported amounts of revenues, expenses,
assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions.
Fair value of Financial Instruments
The Company's financial instruments consist principally of cash and
cash equivalents, accounts receivable, accrued liability and other
payables. The carrying amounts of such financial instruments in the
accompanying balance sheets approximate their fair values due to
their relatively short-term nature. Transactions involving related
parties cannot be presumed to be carried out on an arm's-length
basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with
related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that
prevail in arm's-length transactions unless such representations
can be substantiated. It is not, however, practical to determine
the fair value of other payables to related parties due to their
related party nature.
Construction in progress
Direct costs that are related to the construction of property and
equipment incurred in connection with bringing the assets to their
intended use are capitalized as construction in progress.
Construction in progress is transferred to specific property and
equipment and the depreciation of these assets commences when the
assets are ready for their intended use. As of December 30, 2016
and 2015, the balance of construction in progress was $nil and
$3,115,068, respectively, which was primarily related to the
refurbishment of a leased casino hotel building.
Foreign Currency Translation
The accompanying consolidated financial statements are presented in
United States dollars ("USD"). The functional currency of Wonderful
Gate located in Macau is Hong Kong Dollars ("HKD"), and the
functional currency of Glorywin, Top Point and Gwin is the USD. The
financial statements are translated into US dollars from HK$ at
period-end exchange rates for assets and liabilities, and weighted
average exchange rates for revenues and expenses. Capital accounts
are translated at their historical exchange rates when the capital
transactions occurred.
The Hong Kong Monetary Authority ("HKMA"), Hong Kong's central
bank, maintains a Linked Exchange Rate System since 1983. The HKMA
operates Convertibility Undertakings on both the strong side and
the weak side of the Linked Rate of US$1: HK$7.8. Thus, the
consistent exchange rate used has been 7.80 HKD per each USD.
Foreign currency transactions are those that required settlement in
a currency other than HKD. Gain or loss from foreign currency
transactions, or exchange loss, are recognized in income in the
period they occur.
Related Party Transactions
A related party is generally defined as (i) any person that holds
10% or more of the Company's securities including such person's
immediate families, (ii) the Company's management, (iii) someone
that directly or indirectly controls, is controlled by or is under
common control with the Company, or (iv) anyone who can
significantly influence the financial and operating decisions of
the Company. A transaction is considered to be a related party
transaction when there is a transfer of resources or obligations
between related parties.
Stock-Based Compensation
The Company accounts for stock based compensation issued to
employees in accordance with ASC 718 "Stock Compensation". ASC 718
requires companies to recognize an expense in the statement of
income at the grant date of stock options and other equity based
compensation issued to employees. The Company accounts for
non-employee share-based awards in accordance with ASC 505-50
"Equity-based payments to nonemployees".
Operating Leases
Leases where substantially all the rewards and risks of ownership
of assets remain with the leasing company are accounted for as
operating leases. Payments made under operating leases are charged
to the consolidated statements of operations on a straight-line
basis over the lease period.
Cash and Cash Equivalents
We maintain cash balances in non-interest-bearing accounts, which
do not currently exceed federally insured limits. For the purpose
of the statements of cash flows, all highly liquid investments with
an original maturity of three months or less are considered to be
cash equivalents.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are presented net of an allowance for doubtful
accounts. Management of the Company makes judgments as to its
ability to collect outstanding receivables and provides allowances
for the portion of receivables when collection becomes doubtful.
Provisions are made based upon a specific review of all significant
outstanding invoices. For those invoices not specifically reviewed,
provisions are provided at different rates, based upon the age of
the receivables. In determining these percentages, management
analyzes its historical collection experience and current economic
trends. If the historical data the Company uses to calculate the
allowance for doubtful accounts does not reflect the future ability
to collect outstanding receivables, additional provisions for
doubtful accounts may be needed and the future results of
operations could be materially affected. As of December 31, 2016
and March 31, 2016, the Company did not establish, based on a
review of outstanding balances, an allowance for doubtful
accounts.
Income Taxes
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. A valuation allowance is
provided for significant deferred tax assets when it is more likely
than not, that such asset will not be recovered through future
operations. Current income taxes are provided for in accordance
with the laws and regulations applicable to the Company as enacted
by the relevant tax authorities.
Revenue Recognition
Since Wonderful Gate was acquired, the Company has been engaged in
service of introducing of sub-junkets and information technology
(IT) company to land-based casinos and receiving an agreed
percentage of total bets as revenue. For sub-junkets introduction
service and IT infrastructure introduction service performed, the
Company charge s 0.2% and 0.05%, respectively, of total bets played
by players introduced by sub-junkets from the three casinos located
in Cambodia.
At the end of each month, the IT company introduced by the Company
generates a bet statement of the three casinos where all the
playing information is presented, and that lays the ground for
revenue calculation. After both the Company and the casinos agree
with the information of the bet statement, settlement is prepared
by the casinos and the Company usually gets paid on the 7th of the
following month.
After the Resigning Officers resigned from their position and do
not properly handover, and also they controlling both 2 casinos and
IT company relationship, we have lost the entire business of junket
and we have write off all the profits and revenue in previous
fiscal year ended March 31, 2016.
Despite in September 2016, company has acquired Top Honesty Biomass
Sdn Bhd (THBSB), a company incorporated in Malaysia which planning
to commence new business related to biomass products, however,
THBSB do not commence any business that generate any income as of
December 31, 2016.
Recent accounting pronouncements
In August 2015, the FASB issued ASU 2015-14, “Revenue from
Contracts with Customers (Topic 606):
Deferral of the Effective Date”. The amendments in ASU 2015-14
defer the effective date of ASU 2014-09 for all entities by one
year. Public business entities, certain not-for-profit entities,
and certain employee benefit plans should apply the guidance in ASU
2014-09 to annual reporting periods beginning after December 15,
2017, including interim reporting periods within that reporting
period. Earlier application is permitted only as of annual
reporting periods beginning after December 15, 2016, including
interim reporting periods within that reporting period. The Company
is currently in the process of evaluating the impact of the
adoption on its consolidated financial statements. In September
2015, the FASB issued ASU 2015-16, “Business Combinations (Topic
805): Simplifying the Accounting for Measurement-Period
Adjustments”. The amendments in ASU 2015-16 require that an
acquirer recognize adjustments to estimated amounts that are
identified during the measurement period in the reporting period in
which the adjustment amounts are determined. The amendments require
that the acquirer record, in the same period’s financial
statements, the effect on earnings of changes in depreciation,
amortization, or other income effects, if any, as a result of the
change to the estimated amounts, calculated as if the accounting
had been completed at the acquisition date. The amendments also
require an entity to present separately on the face of the income
statement or disclose in the notes the portion of the amount
recorded in current-period earnings by line item that would have
been recorded in previous reporting periods if the adjustment to
the estimated amounts had been recognized as of the acquisition
date. The amendments in the ASU are effective for public business
entities for fiscal years beginning after December 15, 2015,
including interim periods within those fiscal years. The adoption
of this standard is not expected to have a material impact on the
Company’s consolidated financial statements. In November 2015, the
FASB issued ASU 2015-17, “'Income Taxes (Topic 740): Balance Sheet
Classification of Deferred Taxes”. The amendments in ASU 2015-17
eliminates the current requirement for organizations to present
deferred tax liabilities and assets as current and noncurrent in a
classified balance sheet. Instead, organizations will be required
to classify all deferred tax assets and liabilities as noncurrent.
The amendments in the ASU are effective for public business
entities for financial statements issued for annual periods
beginning after December 15, 2016, and interim periods within those
annual periods. The Company is currently in the process of
evaluating the impact of the adoption on its consolidated financial
statements. In January 2016, the FASB issued ASU 2016-01,
“Financial Instruments - Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities”. Among
other things, the amendments in ASU 2016-01 require equity
investments (except those accounted for under the equity method of
accounting, or those that result in consolidation of the investee)
to be measured at fair value with changes in fair value recognized
in net income, public business entities to use the exit price
notion when measuring the fair value of financial instruments for
disclosure purposes, separate presentation of financial assets and
financial liabilities by measurement category and form of financial
asset (i.e., securities or loans and receivables), and eliminates
the requirement for public business entities to disclose the
method(s) and significant assumptions used to estimate the fair
value that is required to be disclosed for financial instruments
measured at amortized cost. The amendments in the ASU are effective
for public companies for fiscal years beginning after December 15,
2017, including interim periods within those fiscal years. The
adoption of this standard is not expected to have a material impact
on the Company’s consolidated financial statements.
Note 3 – Accounts Receivable
Accounts receivable consists of the following:
|
|
|
As of
December 31,
2016
|
|
|
|
As of
March 31,
2016
|
|
Introduction of IT company |
|
$ |
– |
|
|
$ |
– |
|
Introduction
of sub-junkets |
|
|
– |
|
|
|
– |
|
Total |
|
$ |
– |
|
|
$ |
– |
|
We have written off the entire amount receivable in previous year
ended March 31, 2016 because our junket business was taken away by
Mr. Sing Hong Hong, former major shareholder, and his concerted
party, without our consent, and our company has no any receivables
since then.
Note 4 – Income Taxes
Wonderful Gate, the operating entity of the Company, is located in
Macau, China. Income received in Macau is taxable under Macau's
Complementary Tax provisions, irrespective of the beneficiary being
an individual or a corporation, its particular line of business,
its nationality or domiciliation, without prejudice to the
particular deductions and allowances each taxpayer enjoys.
Companies are required to declare their annual profit and such
profit is subject to Complementary Tax. If dividend is declared,
taxable profit is based on taxable profit (after dividends have
been paid). Law No.15/2015 (the 2016 Budget Law) remains the
exempted portion of income to MOP600, 000 and determines that the
excess of taxable income be taxed at the relevant brackets (0% from
MOP0 to MOP600, 000 and 12% on the excess). These rates apply to
the declared taxable profit (gross income less allowable
deductions) from all income generating sources, except professional
tax and property income, taxed separately under different
regulations. The provision for income taxes as of March 31, 2016
and 2015 was $nil and $344,002, respectively. We do not have any
provision of taxes as of March 31, 2016 because we have suffer loss
on discontinue of business due to Mr. Ting Hong Sing and his
concerted parties have taken away our entire business without our
consent.
The Company's subsidiary, Feroce Drago Inc, is incorporated in
Seychelles, and is subject to company tax at a tax rate of 25%. No
provision for income taxes in Seychelles has been made as the
Company had no Seychelles taxable income as of December 31,
2016.
Glorywin is incorporated in the State of Nevada and is subject to
the United States federal income tax at an effective tax rate of
34%.
Little Wooden Horse Trading Company Limited is incorporated in
Macau, China. Income received in Macau is taxable from 0% to 12%.
No provision for income taxes in Macau has been made as the Company
had no Macau taxable income as of December 31, 2016.
THBSB is incorporated in Malaysia and is subject to company tax at
a rate ranging from 0% to 25% based on annual taxable profit. No
provision for income taxes in Malaysia has been made as THBSB had
no taxable income as of December 31, 2016.
Income taxes are calculated on a separate entity basis. Deferred
income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. The provisions for income taxes as of December 31, 2016
and 2015 are summarized as follows:
|
|
Nine Months
Ended December 31, |
|
|
|
2016 |
|
|
2015 |
|
Current taxes |
|
$ |
– |
|
|
$ |
602,954 |
|
Deferred
taxes |
|
|
– |
|
|
|
– |
|
Total |
|
$ |
– |
|
|
$ |
602,954 |
|
The table below summarizes the difference between the U.S.
statutory federal tax rate and the Company's effective tax rate for
the nine months ended December 31, 2016 and 2015:
|
|
Nine Months Ended December 31, |
|
|
|
2016 |
|
|
2015 |
|
U.S. federal income tax
rate |
|
|
34% |
|
|
|
34% |
|
Foreign income note recognized in the
U.S. |
|
|
(34% |
) |
|
|
(34% |
) |
Macau Complementary tax |
|
|
12% |
|
|
|
12% |
|
Kingdom of Cambodia company tax |
|
|
0% |
|
|
|
0% |
|
Effect of income
tax difference under different tax jurisdictions |
|
|
3% |
|
|
|
3% |
|
Total effective
income tax rate |
|
|
15% |
|
|
|
15% |
|
Note 5 - STOCKHOLDERS' EQUITY
Stock-splits
On August 19, 2013, the Company's board of directors and
shareholders approved a one thousand-for-one reverse stock split of
the Company's common stock. On November 7, 2013, the Company issued
336 shares of common stock as fractional shares from the August 19,
2013 reverse stock split. All reference to share and per share
amounts in the consolidated financial statement and accompanying
notes to the consolidated financial statements have been
retroactively restated to reflect the one thousand-for-one reverse
stock split, unless otherwise noted.
Shares Issued
On June 17, 2014, the Company issued 10,195,294 restricted shares
to Taipan Pearl Sdn Bhd, Wenwei Wu, Boom Siong Lee and Zhen Long Ho
as consideration for 1,000 shares of Top Point. The shares were
booked at par value issuance cost with a decrease to additional
paid-in capital of $10,195 due to treatment requirements for stock
granted for an acquisition of an entity under common control. The
transaction was accounted for as an acquisition of entity under
common control which requires booking the transaction at historical
cost.
On November 18, 2014, the Company issued 600,000 restricted shares
to Taipan Pearl Sdn Bhd, its major shareholder, 100,000 shares to
Eng Wah Kung, its Chief Executive Officer at the time, and 100,000
shares to its public relationship company as consideration for
their services provided. The total fair value of the common stock
was $1,600,000 based on the closing price of the Company's common
stock on the date of grant and the expense was included in general
and administrative expenses for the year ended March 31, 2015. The
restriction period is one year from the grant date.
On July 1, 2015, the Company issued 100,000 restricted shares of
the Company's common stock valued at $2.25 per share to Mr.
Muhammad Shahrezza Chong as compensation for his service to the
Company as Director of Public Relationships. The total fair value
of the common stock was $225,000 based on the closing price of the
Company's common stock on the date of grant and the expense was
included in general and administrative expenses for the nine months
ended December 31, 2015. The restriction period is one year from
the grant date.
On March 9, 2016, the Company issued an aggregate of 30,000,000
shares of the Company’s Common Stock to Mr. Wu to acquire the
Little Wooden Horse Trading Company Limited. The issuance of the
shares was exempt from registration under the Securities Act of
1933 pursuant to Section 4(a)(2) thereof on the basis that the
transaction did not involve a public offering. The shares are
subject to restrictions on resale pursuant to Commission Rule 144
under the Securities Act.
On September 26, 2016, the Company issued an aggregate of
51,200,000 shares of the Company’s Common Stock to Mr Xuan to
acquire the THBSB. The issuance of the shares was exempt from
registration under the Securities Act of 1933 pursuant to Section
4(a)(2) thereof on the basis that the transaction did not involve a
public offering. The shares are subject to restrictions on resale
pursuant to Commission Rule 144 under the Securities Act.
Debt forgiveness by related party
On June 17, 2014, Janet Somsen paid and released the Company of
$16,869 of outstanding liabilities. As Ms. Somsen was a shareholder
of the Company, the transaction was accounted for as contributed
capital.
On November 18, 2014, the Company issued 600,000 restricted shares
to Taipan Pearl Sdn Bhd, its major shareholder, 100,000 shares to
Eng Wah Kung, its Chief Executive Officer at the time, and 100,000
shares to its public relationship company as consideration for
their services provided. The total fair value of the common stock
was $1,600,000 based on the closing price of the Company's common
stock on the date of grant and the expense was included in general
and administrative expenses for the year ended March 31, 2015. The
restriction period is one year from the grant date.
On July 1, 2015, the Company issued 100,000 restricted shares of
the Company's common stock valued at $2.25 per share to Mr.
Muhammad Shahrezza Chong as compensation for his service to the
Company as Director of Public Relationships. The total fair value
of the common stock was $225,000 based on the closing price of the
Company's common stock on the date of grant and the expense was
included in general and administrative expenses for the nine months
ended December 31, 2015. The restriction period is one year from
the grant date.
Debt forgiveness by related party
On June 17, 2014, Janet Somsen paid and released the Company of
$16,869 of outstanding liabilities. As Ms. Somsen was a shareholder
of the Company, the transaction was accounted for as contributed
capital.
Note 6 – RELATED PARTY TRANSACTIONS
The Company's officers, directors and other related parties, from
time to time, provided advances to the Company for working capital
purpose. These advances are short-term in nature, unsecured and
payable on demand. There are no any related party transactions as
of December 31, 2016 and March 31, 2016.
Note 7 - COMMITMENTS AND CONTINGENCIES
On November 19, 2015, the Company entered into an agreement for the
lease of a virtual office in Macau for monthly rental of MOP1,620
(approximately $200). The lease began on November 19, 2015 and will
expire on November 18, 2016. Company renewed the agreement for
another 6 months until May 18, 2017.
ITEM
2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. |
Special Note Regarding Forward Looking Statements
In addition to historical information, this report contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We use words such as
“believe,” “expect,” “anticipate,” “project,” “target,” “plan,”
“optimistic,” “intend,” “aim,” “will” or similar expressions which
are intended to identify forward-looking statements. Such
statements include, among others, those concerning market and
industry segment growth and demand and acceptance of new and
existing products; any projections of sales, earnings, revenue,
margins or other financial items; any statements of the plans,
strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; as
well as all assumptions, expectations, predictions, intentions or
beliefs about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, including those identified in
Item 1A “Risk Factors” included in our Annual Report on Form 10-K
for the year ended March 31, 2015 as well as assumptions, which, if
they were to ever materialize or prove incorrect, could cause the
results of the Company to differ materially from those expressed or
implied by such forward-looking statements.
Readers are urged to carefully review and consider the various
disclosures made by us in this report and our other filings with
the SEC. These reports attempt to advise interested parties of the
risks and factors that may affect our business, financial condition
and results of operations and prospects. The forward-looking
statements made in this report speak only as of the date hereof and
we disclaim any obligation, except as required by law, to provide
updates, revisions or amendments to any forward-looking statements
to reflect changes in our expectations or future events.
Use of Terms
Except where the context otherwise requires and for the purposes of
this report only:
|
· |
“Glorywin”,
“Company,” “we,” “us,” or “our” are to the combined business of
Glorywin Entertainment Group Inc., a Nevada corporation, and its
consolidated subsidiaries: Wonderful Gate Strategy Company Limited,
Top Point Limited and GWIN Co Ltd; |
|
· |
“Wonderful
Gate” is to Wonderful Gate Strategy Company Limited, a company
incorporated in Macau; |
|
· |
“Top
Point” is to Top Point Limited, a company incorporated in
Samoa; |
|
· |
“Gwin” is
to Gwin Co Lrd, a company incorporated in Kingdom of
Cambodia; |
|
· |
“Cambodia” is
to the Kingdom of Cambodia; |
|
· |
“SEC” is
to the Securities and Exchange Commission; |
|
· |
“Exchange
Act” is to the Securities Exchange Act of 1934, as
amended; |
|
· |
“Securities
Act” is to the Securities Act of 1933, as amended;
and |
|
· |
“U.S.
dollars,” “dollars” and “$” are to the legal currency of the United
States. |
Overview of our Business
The Company was formed in the state of Nevada on August 26, 2010
under the name "Zippy Bags, Inc." to provide retail sales of
snowboard carrying bags to the general public.
After the takeover by new management on June 17, 2014, the Company,
through its 100% indirectly owned subsidiary, Wonderful Gate,
became principally engaged in the service of introducing
sub-junkets and information technology infrastructure to land-based
casinos. For sub-junkets introduction service and IT infrastructure
introduction service performed, we charge 0.2% and 0.05%,
respectively, of total bets played by players introduced by
sub-junkets to the casinos located in Cambodia.
On October 30, 2014, the Company filed a certificate of amendment
(the "Amendment") to its Certificate of Incorporation with the
Secretary of State of the State of Nevada in order to change its
name to "Glorywin Entertainment Group, Inc." in order to better
reflect the direction and business of the Company. The Company has
adopted a fiscal year end of March 31.
We have established a website (www.glorywinentertainment.com) which
sets forth general information for the Company.
Based on our current operating plan, we expect that we will be able
to generate revenue that is sufficient to cover our expenses for
the next twelve months. Our ability to maintain sufficient
liquidity is dependent on our ability to raise additional
capital.
Recent Development
In January 2016, we have started preparing ourselves to achieve all
requirements in order to up-list to NASDAQ. We are confident to
achieve all up-listing requirements in the next 6 months then we
will submit our application for up-listing.
After the Company launched mobile application for Android operating
system phone users on August 1, 2015, the Company started the
process to develop the mobile applications for IOS operating system
phone users. Mobile applications are intended to provide online
gaming to customers where such activity is legal. The software is
provided by a third party vendor who is providing the on-line
casino platform in selected markets. Development of the gaming
mobile applications requires the Company to customize the
appearance and branding of the third party software, and establish
merchant services to accept payments and facilitate distribution of
winnings profits.
Player acquisition is a key factor for organic growth in the online
gaming industry. Players are primarily acquired from affiliates for
a fixed fee or percentage of earnings based on negotiated
predetermined criteria. Affiliates are websites or individuals that
attract players through various means such as player news/interest
websites, email campaigns or other relationships. The key is that
payment to affiliates takes place only when negotiated criteria are
met. The criteria may be player minimum deposit, level of play, or
revenue earned. The critical element is that unlike most marketing
campaigns, the revenues returned by marketing are
generally predictable.
The key elements of player retention are the creation of exciting
opportunities to maintain player interest and increase play
frequency. Similar to land-based casino's compensation programs,
the tools used for this purpose include prizes, "free money,"
opportunities to play against famous (or infamous) players, and
tournament qualifications.
Results of Operations
Comparison of Three Months Ended December 31, 2016 and
2015
Sales revenue . Our sales revenue is primarily
generated from introducing players to casinos throughout the Asian
region. Sales revenue decreased by $1,948,295 or 43%, to $NIL for
the three months ended December 31, 2016, from $1,948,295 for the
same period in 2015. The decrease was due to the cessation of
operations.
Cost of sales . We have no cost of sales in view of
the nature of our business as earning commission from land based
casinos. Hence our cost of sales is Nil for both three months ended
December 31, 2016 and 2015.
Gross profit . Our gross profit is equal to the
difference between our sales revenue and our cost of sales. Due to
the nature of our business merely earning commission from land
based casinos, we have no cost of sales and gross profit remained
100% of sales. Gross profit decreased to $(41,513) for the three
months ended December 31, 2016, from $1,274,590 for the same period
in 2015. The decrease in our gross profit margin was mainly
attributable to cessation of operations.
Selling, General and Administrative expenses . Our
administrative expenses consist of the costs associated with staff
and support personnel who manage our business activities. Our
administrative expenses decreased by $897,514, or 69%, to $407,093
for the three months ended December 31, 2015, from $1,304,607 for
the same period in 2014. As a percentage of sales revenue,
administrative expenses decreased to 21% for the three months ended
December 31, 2015, as compared to 96% for the same period in 2014.
High administrative expenses in for the same period in 2014 was
primarily because there were shares issued for services valued at
fair market value in addition to salaries and rental expenses.
There were no shares issued for the same period in 2015 which led
to decrease in administrative expenses.
Liquidity and Capital Resources
As of December 31, 2015, we had cash and cash equivalents of
$13,015, primarily consisting of cash on hand and demand deposits.
We believe that our existing sources of liquidity will be
sufficient to fund our operations, anticipated capital
expenditures, working capital and other financing requirements for
at least the next twelve months.
The following table summarizes total assets, accumulated profit,
stockholder's equity and working capital as of December 31, 2016
and March 31, 2016.
|
|
December
31, 2016 |
|
|
March
31, 2016 |
|
Total Assets |
|
$ |
252 |
|
|
$ |
252 |
|
|
|
|
|
|
|
|
|
|
Accumulated Profit |
|
$ |
(2,022,517 |
) |
|
$ |
(1,963,813 |
) |
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
$ |
(91,903 |
) |
|
$ |
(33,011 |
) |
|
|
|
|
|
|
|
|
|
Net Working Capital (Deficit) |
|
$ |
(91,903 |
) |
|
$ |
(33,011 |
) |
Operating Activities
Net cash provided by operating activities was $(188) for the nine
months ended December 31, 2016, compared with $(200,959) for the
same period in 2015. The increase in net cash provided by operating
activities was mainly because net income has increased.
Investing Activities
Net cash used in investing activities was $NIL for the nine months
ended December 31, 2016, compared with $(91,159) in the same period
in 2015. The net cash used in investing activities during the nine
months ended December 31, 2015 was primarily used for refurbish
cost for the casino building leased under Gwin.
Financing Activities
Net cash used in financing activities was $91,159 for the nine
months ended December 31, 2015, compared with net cash
provided by financing activities of $NIL for the same period in
2016. The decrease in net cash provided by financing activities
resulted from the Company has repaid the advances to related
parties.
Inflation
Inflation and changing prices have not had a material effect on our
business, and we do not expect that inflation or changing prices
will materially affect our business in the foreseeable future.
However, our management will closely monitor price changes in the
Cambodian economy and our industry and continually maintain
effective cost controls in operations.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, sales or
expenses, results of operations, liquidity or capital expenditures,
or capital resources that are material to an investment in our
securities.
Critical Accounting Policies
Critical accounting policies are those we believe are most
important to portraying our financial conditions and results of
operations and also require the greatest amount of subjective or
complex judgments by management. Judgments and uncertainties
regarding the application of these policies may result in
materially different amounts being reported under various
conditions or using different assumptions. See Note 2 to our
unaudited consolidated financial statements included elsewhere in
this report.
Revenue Recognition
Revenues from service contracts are recognized as services are
performed if collectability is reasonably assured.
The Company is engaged in service of introducing of sub-junkets and
information technology (IT) company to land-based casinos and
receiving an agreed percentage of total bets as revenue. For
sub-junkets introduction service and IT infrastructure introduction
service performed, the Company charges 0.2% and 0.05%,
respectively, of total bets played by players introduced by
sub-junkets to the casinos located in Cambodia.
Recently Issued Accounting Pronouncements
In August 2015, the FASB issued ASU 2015-14, “Revenue from
Contracts with Customers (Topic 606): Deferral of the Effective
Date”. The amendments in ASU 2015-14 defer the effective date of
ASU 2014-09 for all entities by one year. Public business entities,
certain not-for-profit entities, and certain employee benefit plans
should apply the guidance in ASU 2014-09 to annual reporting
periods beginning after December 15, 2017, including interim
reporting periods within that reporting period. Earlier application
is permitted only as of annual reporting periods beginning after
December 15, 2016, including interim reporting periods within that
reporting period. The Company is currently in the process of
evaluating the impact of the adoption on its consolidated financial
statements.
In September 2015, the FASB issued ASU 2015-16, “Business
Combinations (Topic 805): Simplifying the Accounting for
Measurement-Period Adjustments”. The amendments in ASU 2015-16
require that an acquirer recognize adjustments to estimated amounts
that are identified during the measurement period in the reporting
period in which the adjustment amounts are determined. The
amendments require that the acquirer record, in the same period’s
financial statements, the effect on earnings of changes in
depreciation, amortization, or other income effects, if any, as a
result of the change to the estimated amounts, calculated as if the
accounting had been completed at the acquisition date. The
amendments also require an entity to present separately on the face
of the income statement or disclose in the notes the portion of the
amount recorded in current-period earnings by line item that would
have been recorded in previous reporting periods if the adjustment
to the estimated amounts had been recognized as of the acquisition
date. The adoption of this standard is not expected to have a
material impact on the Company’s consolidated financial
statements.
In January 2016, the FASB issued ASU 2016-01, “Financial
Instruments - Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities”. Among
other things, the amendments in ASU 2016-01 require equity
investments (except those accounted for under the equity method of
accounting, or those that result in consolidation of the investee)
to be measured at fair value with changes in fair value recognized
in net income, public business entities to use the exit price
notion when measuring the fair value of financial instruments for
disclosure purposes, separate presentation of financial assets and
financial liabilities by measurement category and form of financial
asset (i.e., securities or loans and receivables), and eliminates
the requirement for public business entities to disclose the
method(s) and significant assumptions used to estimate the fair
value that is required to be disclosed for financial instruments
measured at amortized cost. The adoption of this standard is not
expected to have a material impact on the Company’s consolidated
financial statements.
ITEM
3. |
QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not Applicable.
ITEM
4. |
CONTROLS AND
PROCEDURES. |
We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed by us in reports
that we file or submit under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), is recorded, processed, summarized
and reported within the time periods specified in the Securities
Exchange Commission (“SEC”) rules and forms, and that such
information is accumulated and communicated to our management,
including our Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"), as appropriate, to allow timely decisions
regarding required disclosure.
Limitations on the Effectiveness of Disclosure
Controls
In designing and evaluating the Company's disclosure controls and
procedures, management recognized that disclosure controls and
procedures, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Additionally, in
designing disclosure controls and procedures, Company management
necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible disclosure controls and
procedures. The design of any disclosure controls and procedures
also is based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential
future conditions.
Evaluation of Disclosure Controls and Procedures
Our CEO and CFO have evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) as of the end of the period covered by this
report. Based on the evaluation, they concluded that our
disclosure controls and procedures are not effective in timely
alerting them to material information relating to us that is
required to be included in our periodic SEC filings and ensuring
that information required to be disclosed by us in the reports we
file or submit under the Act is accumulated and communicated to our
management, including our chief financial officer, or person
performing similar functions, as appropriate to allow timely
decisions regarding required disclosure, for the following
reasons:
|
· |
The
Company does not have an independent board of directors or audit
committee; |
|
· |
We do
not have an independent body to oversee our internal controls over
financial reporting. |
We plan to rectify these weaknesses by implementing an independent
board of directors.
Changes in Internal Control over Financial
Reporting
We regularly review our system of internal control over financial
reporting and make changes to our processes and systems to improve
controls and increase efficiency, while ensuring that we maintain
an effective internal control environment. Changes may include such
activities as implementing new, more efficient systems,
consolidating activities, and migrating processes.
There were no changes in our internal controls over financial
reporting during the third quarter of 2015 that have materially
affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
PART II
OTHER INFORMATION
ITEM
1. |
LEGAL
PROCEEDINGS. |
From time to time, we may become involved in various lawsuits and
legal proceedings, which arise, in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an
adverse result in these, or other matters, may arise from time to
time that may harm our business. We are currently not aware of any
such legal proceedings or claims that we believe will have a
material adverse effect on our business, cash flows, financial
condition or operating results.
Not applicable.
ITEM
2. |
DEFAULTS UPON SENIOR
SECURITIES. |
None.
ITEM
3. |
MINE SAFETY
DISCLOSURES. |
Not applicable.
ITEM
4. |
OTHER
INFORMATION. |
We have no information to disclose that was required to be in a
report on Form 8-K during the third quarter of 2015, but was not
reported. There have been no material changes to the procedures by
which security holders may recommend nominees to our board of
directors.
The list of exhibits in the Exhibit Index to this report is
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date:
June 15, 2022 |
GLORYWIN
ENTERTAINMENT GROUP INC. |
|
|
|
|
|
|
|
By: |
/s/
Sorphea Rath |
|
Sorphea
Rath, Chief Executive Officer |
|
(Principal
Executive Officer) |
|
By: |
/s/ Solin
Hoem |
|
Solin
Hoem, Chief Financial Officer |
|
(Principal Financial Officer and Principal
Accounting Officer)
|
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